Washington (AFP) - A bump up in costs for housing and medical care drove US inflation in November up at the fastest pace in a year, while energy prices moderated, according to government data released Wednesday.
The stronger-than-expected rise in the Consumer Price Index comes hours before the Federal Reserve is widely expected to announce it is leaving interest rates untouched, at least for now.
CPI rose 0.3 percent compared to October, reflecting a jump in gasoline prices, and higher costs for lodging, medical care, food and recreation, the Labor Department data showed.
That was faster than the 0.2 percent increase economists were expecting.
However, without volatile food and fuel prices, the "core" inflation index rose 0.2 percent, matching forecasts.
Upward pressures were more evident in prices compared to November 2018. Year-on-year, the index accelerated three tenths of a percentage point to 2.1 percent, the fastest increase in a year, according to the report.
The 12-month index was held down by declines in costs for gasoline and fuel oil, the data showed.
Core CPI posted a stronger 2.3 percent gain compared to November of last year, the same as in October.
Medical care costs jumped 4.2 percent from a year ago, while shelter rose 3.3 percent.
Though it was hotter than expected, the November price data are unlikely to persuade central bankers that inflation is becoming a problem.
Because inflation has run below the Fed's target levels for two years, Fed officials now say they may be willing to tolerate a period of faster increases.
CPI in recent years has typically run above the Fed's preferred measure, the Commerce Department's Personal Consumption Expenditures price index.
Ian Shepherdson of Pantheon Macroeconomics said Wednesday that the annual measures of inflation could rise further in the first half of 2020, in part due to import tariffs that are beginning to show up in consumer prices.
"Nothing very terrible is likely, but core inflation could easily hit 2.5% by early spring, for the first time since September 2008," he said in an analysis.
